Photo/Illutration In this Oct. 23 photo, an employee sits at the Ant Group office in Hong Kong. (AP Photo)

HONG KONG--China’s shock suspension of Ant Group’s record $37 billion listing in a last-minute regulatory ambush looks set to hit the financial technology giant’s growth prospects and cut into its valuation.

The move to suspend Ant’s IPO was seen as a stunning rebuke for billionaire Jack Ma, a former English teacher who built Alibaba Group Holding Ltd. and affiliate Ant into two of China’s biggest success stories.

Ant’s enormous heft and Ma’s recent criticism of global financial regulations, however, put him on a collision course with China’s top regulators.

That said, analysts and investors expect the dual Hong Kong and Shanghai listing to be delayed and not completely derailed.

“Ant’s business is likely to be restricted by new financial regulations. As a result, the relaunched IPO price will most likely be lowered,” said Andrew Collier, managing director of Orient Capital Research.

The Tuesday decision by the Shanghai stock exchange to suspend the listing followed a meeting between China’s financial regulators and Ant executives, including Ma, who were told the company’s lucrative online lending business would face tighter scrutiny, sources told Reuters.

The exact nature of the regulators’ concerns and just how long a suspension might last is not known. The Shanghai bourse described the meeting as a material event that could cause Ant to be disqualified from listing.

Ant said in a filing on Wednesday it would maintain close communication with regulatory authorities and the Hong Kong and Shanghai bourses on the progress of its IPO and listing and would disclose information in a timely manner.

The move by regulators has been interpreted as an effort to cut Ma down to size after he made a speech at an event last month attended by Chinese regulators that criticized the financial and regulatory system as stifling innovation.

Regulators have, however, also become uncomfortable with banks increasingly using micro-lenders or third-party technology platforms such as Ant for underwriting loans amid fears of rising defaults and a deterioration in asset quality in a pandemic-hit economy.

State media on Wednesday also described the move as necessary and in the public interest.

“The basic message of Chinese regulators’ intervention in the Ant IPO is that this de-risking agenda is still the top priority. No innovation is so important that it can be allowed to create financial instability,” said Andrew Batson at Gavekal Research.

Batson added Ant would “almost certainly” return to the market at some point, but it might have to make substantial changes to its internal organization and business model to meet regulatory requirements.

Analysts pointed to a consultation paper issued by the People’s Bank of China and the China Banking and Insurance Regulatory Commission on Monday that recommends the tightening of regulations for online micro-lending companies--which in retrospect foreshadowed the regulators’ move against Ant.

Iris Tan, a senior equity analyst at Morningstar, said she thought regulators were aiming to level the playing field for fintech players and traditional financial institutions and that she expects Ant will be required to have more registered capital for its consumer credit business.

But few people were willing to hazard a guess as to just how long the delay might last or how far Ant’s valuation could fall.

Its listing had been set to value Ant at $315 billion, which would have made it Asia’s fifth most valuable firm and worth more than the Industrial and Commercial Bank of China, the world’s biggest bank by assets.

Shares in Alibaba, which has a one-third stake in Ant, were down 6.5 percent in the afternoon trade in Hong Kong on Wednesday. Alibaba’s New York shares ended down 8.1 percent overnight.